Replace or Repair Furnace in Future Rental

10 Replies

Hello everyone!  We are in the middle of our first rental purchase and the home inspection negotiation has begun.  The sellers have offered to replace the furnace in three units and replace window panes OR repair the furnaces, replace the window panes, and recover the roof.  Since we live in a climate where it can get cold, the furnace is important.

The roof shingles have a 24 year life span which is up next year.

Thanks for your input!

No company avatar mediumDori Rutledge, Fogg Creek Properties, LLC

what is the most needed and expensive repair? Do that one my guess would be roof

I'd go with the second option.  It covers all 3 bases- not perfectly but if the repaired furnaces can hold out a year that gives you some time to save up for their replacement.  Also I'm guessing the roof is the most expensive item and if so I'd definitely want to include it.  

@Dori Rutledge

If the decision was mine to make, i would have the owner replace the furnace(s) and the window panes.  However, I would want to know is it one furnace for all three units or does each unit have its own heating system.  It sounds like it is just one furnace. 

I would want to know what type of furnace is he replacing the old one with. Would I be able to choose it. With such a wide range of furnaces on the market today, you want to make sure that you are getting one that is reliable, energy efficient and has solid reviews.  Who is paying the heating cost?  You or the tenants?

I would also want to know how many times the roof has been re-covered in the past.    If it is shingle, how many layers are on it?  If there are too many layers, the shingles may have to be removed and replaced altogether and not just re-covered. 

The reason that I would go for the first option is:

1. A new roof is definitely low maintenance.  You could make that replacement purchase yourself and be nearly worry free for at least another 20+ years....and it comes with a longer warranty than a furnace.  People usually don't call up roofing companies for yearly service maintenance.

2.  A repaired furnace would most likely need another repair by the next winter. 

If it were replaced with a brand new furnace, the only maintenance that you would have to contend with are the yearly service calls at the beginning of each winter.  If it is cared for properly, you should be worry free. 

I installed a brand new roof and two new furnaces for my duplex 10 years ago and have been worry free on both of them.  The heating company only comes out once a year for general maintenance.

Hope this helps but there is more information that I would want to know.

Missy 

Hi Dori,

I would look into the costs of each option, and get a roof quoted.  I would lean towards doing the roof and furnace repairs, then making sure you had reserves for replacement furnaces, which probably won't all quit at once.

We are under contract on a house that needed a roof 15 years ago (no leaks but it is in awful shape) and it was a huge deal to get someone to come quote a roof replacement for me since it is for sale but I found someone who would.  In our case, a new roof with the best shingles would be $10,500 and if we went with a metal roof with a lifetime guarantee it was $11,700.  The metal roof goes right over the old roof so there is no danger of the City deciding we need to re-engineer the roof- this is an old house and if the rafters aren't spaced properly they will have to be redone which is probably a $10k project...  

Our insurance agent said that a new roof wouldn't lower the premium since it isn't our personal home, but it might depending on your company.

Kelly

Thanks for everyone's thoughtful responses.

Here's a little additional info:

  There are three furnaces to be repaired/replaced (property is two duplexes).

  The simple roofs cover 1900 sf on a single level.

  The furnaces are the most expensive cost at 9000 to replace, 6000 to repair.

  Roof recover cost approx. 4000 covering both duplexes.

  Thankfully the tenants pay the heating costs.

  The roof is original.  The recover would of course be the second layer which still meets code.

No company avatar mediumDori Rutledge, Fogg Creek Properties, LLC

id get another opinion on the furnace replacement.  not sure cost there but that is well above what we would pay here.  there might be a way to get more from them.  also around here you cant get insurance on a roof with 2 layers, generally it is a bad idea and too much weight for the structure.  I dont really understand the changing of the window panes either?  so just new glass or new windows entirely?  changing out the glass is a very easy project so not sure I would want them to do that in place of roofing.  lots of red flags on this to me.  

its a tough choice to make, dori, but here are my thoughts. any furnace that is over 12 to 15 years old is nearing the end of its life cycle. personally, the one i replace in my house 3 years ago was 23 years old. it was still working, but probably about as fuel efficient as a campfire. if these furnaces are older than 12 to 15 years old, then they really aren't worth putting any money into them as next year, they will need something else, then the following year, something else again and so on. sooner or later, they will have a heat exchanger issue and then they are shot and you have wasted time and money on them anyway. as far as the roof, well, if it is not leaking now, it could next year, and then again, it could not for years to come. the roof may not have a pretty look when people drive by, but if it is not leaking, well, then it is still doing its job, right? of course a leak could be just around the corner too. at this point, i think i would go with the furnaces. a leaking roof never killed anyone, but a leaking furnace will. they last a while so you will not have to think about replacing them again for a while. the roof, well, if it is not leaking now, leave well enough alone at least for a while. you might be able to find yourself a handyman that would do the roof a lot cheaper than a licensed roof anyway. good luck

I would want the repairs done to my specifications so I would probably push for a credit as closing escrow ed for specific repairs. Replacing 3 natural gas forced air  furnaces with energy efficient units should be around $5,500. I would not waste money on replacing window panes. I would replace single pane windows with energy efficient double pane windows for around $250/piece installed. It doesn't sound like the roof is failing just at that material is at the end of its rated life. They could last perfectly for another 20 years. The way you stated sounds like they would just throw down another layer of shingles which I would also not do. Rip down to original sheathing and do it right with architecture shingles...

Originally posted by @Kyle Hipp :

I would want the repairs done to my specifications so I would probably push for a credit as closing escrow ed for specific repairs. Replacing 3 natural gas forced air  furnaces with energy efficient units should be around $5,500. I would not waste money on replacing window panes. I would replace single pane windows with energy efficient double pane windows for around $250/piece installed. It doesn't sound like the roof is failing just at that material is at the end of its rated life. They could last perfectly for another 20 years. The way you stated sounds like they would just throw down another layer of shingles which I would also not do. Rip down to original sheathing and do it right with architecture shingles...

 I would go with this approach as well. I do not want the outgoing seller to contract to install/repair anything. I want the money myself, either as a credit or a reduction in the sales price, and I will deal with my own repairs and contractors. Roofing is also one of those things that you really want down to the sheathing. Just because something is allowed by code doesn't mean that it is an optimal procedure. Given the choices you have, I would want the money for the furnaces.